Shares of Progenics Pharmaceuticals (NASDAQ:PGNX), a small-cap biopharma focused on oncology, rose as much 14% in early-morning trading on Tuesday.
The jump is traceable to the company receiving bullish ratings from two different analysts.
First, researchers at Brean Capital initiated coverage on the company and rated its shares a buy. The analysts issued a price target of $11, which represents a substantial premium to Monday's closing price of $6.77.
Next, Chad Messer, an analyst at Needham & Company, reiterated his buy rating after he took Progenics' management team on a road trip to meet with a group of potential investors. Messer also reaffirmed his price target of $11 and said that the company could become profitable in 2017.
The markets appear to be reacting favorably to these bullish analyst ratings, and that's why shares are popping today.
It certainly is an exciting time to be an investor in Progenics. The company and its partner Valeant Pharmaceuticals (NYSE:BHC) just launched an oral version of their opioid-induced constipation (OIC) drug Relistor in the third quarter. While the drug has been priced at a premium to Nektar Therapeutics' (NASDAQ:NKTR) OIC drug Movantik, management believes that insurance companies will still offer coverage since a subcutaneous version of the drug has been on their formularies for several years. That's why some analysts believe that sales of Relistor could eventually top $1 billion, which, if achieved, would be a huge boon to Progenics' financial statements.
Progenics is also expected to report pivotal data for its ultra-orphan drug candidate Azedra in the first quarter. The drug is a potential treatment for recurrent pheochromocytoma and paraganglioma, which are types of neuroendocrine tumors. The FDA has already granted this drug with fast-track review, so if all goes well, it could be approved before the end of 2017. Analysts are projecting peak U.S. sales of $185 million.
Finally, Progenics also has an interesting molecular-imaging product candidate, called 1404, that is in late-stage trials. This imaging agent offers hope to help doctors diagnose prostate cancer earlier, which could lead to better outcomes. Interim data is expected in the second half of this year from a phase 3 trial, and if all goes well, the product could be on the market by 2018.
In total, Progenics has several upcoming catalysts for investors to look forward to, and if the oral Relistor launch proceeds smoothly, the company's financial future is looking bright. There's still plenty of risk here, but investors with a high risk tolerance might want to consider putting this company on their radar.
Brian Feroldi has no position in any stocks mentioned. Like this article? Follow him on Twitter where he goes by the handle @Longtermmindset or connect with him on LinkedIn to see more articles like this.
The Motley Fool owns shares of and recommends Valeant Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.